Tax season starts January 29th, and there will be millions of people across the country filing their personal and business taxes. While a lot of people are proactive with their tax planning and preparation, there are millions of others who will wait until the last minute.
Unfortunately, filing taxes is something that many people procrastinate to do. Additionally, preparing and filing taxes can be a long and complicated process, especially for a new business or one that wants to maximize its tax deductions.
If you find yourself coming up on the deadline, you may be left wondering what options you have. Thankfully, you may be able to file for a federal tax extension, which can buy you more time to get your taxes submitted correctly.
If you can’t submit your taxes by the deadline of Monday, April 15, 2019, then you will want to complete IRS Form 4868. The extension is an additional six months which would be Tuesday, October 15, 2019.
Most people are eligible for an extension, but there are a few things to know if you are thinking about filing for one.
- You will have to pay any owed taxes by the original deadline, even if you are granted the extension for filing.
- You can still receive your federal tax refund if you are eligible for one
- If you are in the military serving abroad or in a combat zone, a citizen working or living abroad, or if you were affected by natural disasters you might automatically receive an extra six months from the IRS without needing to file for one.
In addition to the extra six months to file your taxes, here are a few other benefits.
- It can help reduce any late penalties
- Those who are self-employed will have more time to fund retirement plans
- There is more time to recharacterize IRA contributions
- You may save money on accounting services later in the year
- More time to file could mean fewer errors and uncovering more deductions
How do you file for a tax extension?
If you want to file for a tax extension, it’s a relatively simple process. You’ll need access to the internet and about 30 minutes to complete the process.
All business owners need to do for a federal tax extension is to download the correct extension type for your business and submit the request to the IRS. You’ll need to pay any taxes owed at that time, but in most cases, you are automatically approved.
If you’re a sole proprietor, you might not need a separate filing extension form at all. When you access the IRS payment portal, you can simply check the extension option when paying your taxes. The six-month extension is typically applied immediately.
Depending on your circumstances, a federal tax extension may make a lot of sense. In most cases, the extension process is easy and automatic — you’ll just need to pay any due taxes at that time.
Not only can an extension help alleviate some of the pressure of filing your personal and business taxes, but it can also ensure that you find every opportunity possible to maximize your tax deductions — meaning more cash back.
If you want to discuss all your tax options, contact Rivero, Gordimer & Company, a CPA Firm in Tampa with tax and accounting expertise.